This is the second part of the memo that won’t go away even as, in his first encounter with it, the incumbent president of Nigeria, Muhammadu Buhari, approved of it. One of his predecessors, Chief Olusegun Obasanjo, would have nothing against this memo, having coined the phrase “baby capitalists” in relation to soldiers of private enterprise in Nigeria in the year 2000. Notwithstanding the overarching poverty of his statism, he went on to demonstrate some animus against baby capitalists by picking the late Prof Bade Onimode out of a list of policy intellectuals screened and submitted to him at his own request and on the ground that it was only an Onimode who could engage him without being servile. He also tried to critique “baby capitalism” by forming a hegemonic entity called Transcorp.
Two time president of Nigeria and one of its most informed right wingers, Chief Olusegun Obasanjo
Prof Stiglitz, rebellious Chief Economist of the World Bank with his most popular book inset
The World Bank would not go against this memo, not with the 1997 World Development Report which was a critique of the ‘Washington Consensus’. Canvassers of deterritorialisation would have nothing against the memo too even as they would shudder at the late Dr Tukur’s China Wall between local and foreign capitalists. But that won’t annoy them since they recognize that it doesn’t make sense to talk about deterritorialisation without also recognizing re-territorialisation. In other words, to say that capitalism has fused into a worldwide system of thoughts and practices and cannot be spatialized again is not the same thing as saying that the fusion is without spatial boundaries, or winners and losers.
The question then is how come Nigeria has not been able to assert itself in terms of the direction favoured by Dr. Tukur as well as all the big name actors mentioned above? What explains this case of smoke without fire contrary to the wisdom that there is no smoke without fire? Can plastic infatuation with democracy make sense without resolving this question of business model in Nigeria?
- Bourgeois economic theorizing to the contrary notwithstanding, direct participation in the economy by Government is the rule rather than the exception. The world over, not the least is such major capitalist countries as the Federal Republic of Germany, Japan, France, Britain, Italy, Sweden and India. Indeed, even if we were to discount the Socialist countries, namely the Soviet Union, the People’s Republic of China, Viet Nam, Laos, Cambodia, the countries of Eastern Europe and Cuba, which, together, have a population that is well above 1/3 of mankind – and I see no legitimate ground for treating their experience as irrelevant to Nigeria – the international trend in the last 12 decades has been towards greater government participation. The reversal of this trend, such as “privatisation” by Japan in the 1880s, or as was attempted in Chile after the brutal fascist coup of 1973, have been superficial, or inconsequential, minor when compared to the main historical current towards direct government participation in economic ownership and management. But even what happened in Chile is been exaggerated by private enterprise economists who want to prove that there is a strong worldwide trend towards “privatization”, a contention which cannot be supported by empirical data which, in fact, show that the trend is strongly in the other direction, that of greater state intervention, not the least in the U.S. where the Nixon Administration, for example, had to rush in to save Lockheed from collapsing, or in Britain where, still more recently; the Conservative Government moved in to save Leyland Motors from a fate similar to that which had earlier on stared Lockheed in the face.
- Here in Nigeria, direct Government participation in the economy came about as a historical necessity – permanent and irreversible necessity – for, as this necessity would have it, at the point in time when it became politically feasible within capitalist arrangement for Nigeria to restake its claim to the resources of its own territory, the Nigerian Government was the only capitalist of note around to enter into competition with foreign capitalists for the control of these resource. What was true on the eve of Nigeria’s flag independence is still true today, in spite of the recent, phenomenal mushrooming of a new ‘native’ crop of tycoons; the Nigeria Government is still the only local capitalist that can offer anywhere near an effective competition to foreign capitalists on our soil, over the control of our own resources! If anything, this is all the more true today than it was in the 50s and 60s; for while the Nigerian economy has made some progress in the class structure of the society; the industrialized capitalist countries of the world have made still greater progress, thus worsening the relative position of Nigeria in the world and the existence of such new organizations as UNCTAD, UNIDO, the North-South Conference and of their feeble and timid attempts to redress the situation within the context of word capitalism, to all of which Nigerian is an adherent.
- Indeed, it is ironic that the issue of Government direct participation in the economy is being debated right now, for it was settled here in Nigerian as far back as 1973 during that year’s Economic Society of Nigeria Conference, devoted to public Enterprises. During this Conference whose proceedings have been published as a journal by the society, the unanimous agreement of the bourgeois economists gathered there was that direct government participation in Nigeria’s economy was irreversible. Thus Professor H.C. Kodlinye, the then Vice-chancellor of University of Nigeria, Nsukka where the Conference held, in his opening address, led the way in expressing support for state capitalism, though somewhat apologetically:
The late Prof Sam Aluko, one of Nigeria’s most remarkable economists
Time to resolve the debate that won’t go away
The principle is generally accepted that the public sector should play a vital part in Nigeria’s developing economy, but its role should be subjected to continuous and critical evaluation. The government has more resources at its disposal in terms of capital, manpower, etc, than any single individual or group. This recourse are utilized not only in the provision of the traditional public utilities and services such as railway, electricity and power, harbor, highways, medical-care, education, etc, but also investment in industry and commerce, i.e. in areas which in some more developed economies might be regarded as the exclusive preserve of private enterprise. The reality of our situation is that indigenous entrepreneurship has not developed sufficiently to keep pace with its foreign counterpart. The Government has, therefore, added to their traditional role participation in the productive sector of the economy. In any case, the development of the country along modern lines is essentially a governmental obligation which require large capital investment but which are essential for maintaining reasonable living standards but provide low rates of return on capital lend themselves more to public control and maintenance”
The view was then taken up at a greater length by the doyen of the progressive, positivist tendency in the bourgeois economic camp, Professor O. Aboyade, who examined ‘’the role of the state in the development process”…… against the empirical realities of the Nigerian case” and argued that:
The aim of development planning in Nigeria is that economic growth should be accompanied by general development. In other worlds, the benefits of economic advance should be distributed as widely as possible over the entire society. Government as the most important single institution for ensuring the translation of growth into development through the provision of economic and social service, must have, at its disposal, resources sufficient for achieving these goals of society. Government investment activities will no longer be limited to the public corporations and dying industries in which no private company can thrive whilst leaving the virile, expansive and profitable industries to private enterprises.
The Professor removed any doubt whatsoever about support for the dominance of state capitalism as against the dominance of private enterprise when he asserted:
The Western liberal view of this issue is essentially a negative one, namely to cover up gaps and deficiencies in a performance process dominated by private enterprises. Beyond the natural monopolies and semi-public goods, (gas and water- Socialism of the Fabians), public enterprises are defended where private enterprises is unwilling or unable –considering the test of financial profitability – to undertake the production of certain goods and services which may be judged to be socially desirable. …Pressure of international competition in the home or external market, inability to perceive or wait for long term benefits from a given investment programmes with a long gestation period and the fear of large scale unemployment in sensitive areas of the national economy are some of the other additional justifications made for public enterprises in directly productive activities. For an under-developed country, however, the more relevant question should be: why not public enterprise? In other words, the presumption should not be private enterprise in the first instance. The theoretical supremacy of public enterprises should be taken for granted, as implicitly justified by the very character of the existing state of underdevelopment. In this context, the relevant policy becomes one of analyzing and removing obstacles to the expansion of the public sector as a standard production mode”.
Mr. A.E. Ekukinam in his own paper was as forthright and gutsy as Professor Aboyade, if not more, in his support for state capitalism as opposed to private enterprise. Thus for him, “there is no argument today on whether or not the state has an active role to play in the economic development process. This is accepted as a necessity, especially in the developing parts of the world. The issue now is probably on what form such active involvement should take”.
Further down in his paper, he bluntly deposed: in development economics terms, there is no other way; only the Government can command the vast resource necessary to start and keep a modern industry in operation. Thus, attempts to controvert the issue of Government – in business will not really succeed in Nigeria. The argument here is that Government – in business is becoming a way of life in Nigeria and should. It does not depend, nor need it be defended, on ideological grounds. It is dictated by the economics of our time.” Hence, Mr. Ekukinam laid it down that:
“In the rest of this paper, it is assumed that the government is contingently in the entrepreneurial sector to stay. It is also put forward that such active involvement in the economy is necessary if development is to take place and accelerate. It is also put forward that Government investment should not be confined to sectors or activities but should cover any business considered crucial for national economic development and self-reliance – given the resource. It is also deposed that doctrine or ideology, whether from America or Russia, bears no relevance to this development in Nigeria. Yet, ideologically, one can say one thing and, that is that ‘capitalism’ as we were taught to accept, (sic) is dead. States, States, including the United States, are increasingly and actively involved, either openly or covertly, in entrepreneurial investment.”
All the others who spoke, and these included Mr. A.A. Ayida, who, as the president of the Society, preoccupied himself mainly with national constitutional issues; Dr. Pius Okigbo, whom I would put at the head of the more doctrinaire and less rational rightwing of the Nigerian bourgeois economic camp; Professor Bhambri who was certainly to the right of Professor Aboyade; and Mr. S.O. Wey who seemed to occupy more or less the same position as Professor Aboyede within that camp, all accepted the abiding necessity of state capitalism, though the more doctrinaire ones among them were rather mournful in their acceptance of this necessity.
It is thus a debate that was so definitively settled eleven years ago, even in bourgeois economic circle, that is now being reopened, without good cause.
- Privatization’’ is incompatible with an overall planning of the economy, something that has become the trend in the world, at least since the emergence of the Soviet Union which led the way in that direction with ‘miraculous’ consequences. The fact that a Government cannot plan an economy that it does not own and control is amply attested to by the last 22 years in the life of this country during which four development plans were each thrown out of gear by that erratic, unpredictable, greedy and short-sighted factor called the private sector, ‘native’ and foreign. So, is ‘privatisation’ incompatible with even the minimal social objectives enunciated in our development plans and enshrined in the 1979 (modified) Constitution, namely:
The state shall direct its policy towards ensuring-
- The promotion of a planed and balanced economic development;
- That the material resources of the community are harnessed and distributed as best as possible to serve the common good ;
- That the economic system is not operated is such a manner as to permit the concentration of wealth or the means of production and exchange in the hands of a few individuals or of a group; and
- That suitable and adequate shelter, suitable and adequate food, reasonable national minimum living wage, old age care care and pensions and unemployment and sick benefits are provided for all citizens; and
17-(2) (d) exploitation of human or natural resource in any form whatsoever for reasons other than good of the community shall be prevented.
So, how are other African countries doing it?
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More than just a scrap of a plane but of a whole country
Sir, one of the grounds on which the privatization of public enterprises is being recommended, namely the claim that the private sector, unlike the public sector, is efficient, cannot withstand a close examination at all. This is because on close examination, it will turn out that those who want to pass off the private sector as efficient judge it solely on the basis of its ability to make money, ignoring the quality of the “services” it renders and the immense subsidiary support it enjoys from the Government. I insist, Sir, that anybody who argues that the transport “services” provided by the private sector in this country, for example, is efficient cannot themselves have of recent travelled by that transport. Otherwise they would have discovered, among other things (i) that the comfort of passengers does not bother the operators of that transport; (ii) that time is of no consequence to them; and (iii) that they are abysmally dishonest and discourteous. Whatever his station today, any Nigerian who has had to leave home in his teens or twenties in order to get education elsewhere ought to have memories of (i) how lorry, bus, taxi owners and touts, in a bid to fill their vehicle with passengers, first fill them with ‘false passengers’ with the deliberate aim of fooling an intending passenger into believing that they needed just him in order to fill up and leave: a deceitful business method that would keep an intending passenger waiting in a vehicle for upwards of 6 hours, neither travelling nor doing anything useful; (ii) how in the course of a journey a vehicle would arrive at a town early in the evening, stop and then the driver and the owner would come out, lazily walk away as if to look for water or answer the call of nature, only never to return that night, leaving each passenger to fight it out with other passenger for space in an overloaded and overcrowded vehicle; (iii) how when at 7.30 a.m. or 8 a.m the driver and the owner returned, they would have not a word of apology to the passengers, indeed if anything only abuse for those of the passengers who dare to question their behavior; (iv) how it was customary, indeed routine, for vehicles to break down in the middle of a journey, a breaking down due to overloading and poor maintenance, only for those in charge to disappear as if to look for a mechanic, which mechanic would come after a long while together with only the driver’s mate and embark on the repair which might involve the vehicle staying in that spot for three days and, all this while, without the passengers having anybody return their fares or getting an apology. Indeed, those of them who had the courage to ask for refund world receive the rude and irrational retort, “has the vehicle gone away and left you here”?
- If we turn to hotel services, the story is the same. …..
- Perhaps those who would pass off the private sector as efficient would prefer to examine Nigeria’s agricultural development, another terrible basic aspect of our economy that Government has preferred to leave in the ”efficient” hands of the “private sector”, to which Government has ,both directly and through Government- owned banks, advanced billions of naira over the last ten years alone, in addition to building dams, conducting supportive research and experiments, and heavily subsiding fertilizers and agricultural implements. Yet far from the private sector, which dominate our agriculture and which enjoys all this government patronage, feeding the people of this country and supplying industry- itself dominate by the private sector – with the raw materials they need, our import bills for food and industrial raw materials have been rising in direct proportion to the billions lent to bourgeois “farmers” in the private sector. Nor is the private sector efficient even in the distribution of the huge amounts of food imported as a result of its inefficient handling of agricultural production. Thus, this with hard foreign currency provided by Government has become the object of speculative profiteering in the “merciful”, “tender” hands of the “efficient” private sector, speculative profiteering unsurpassed in the annals of mankind. Thus the private sector has doubly sabotaged Government effort to feed the population of this country: (i) the private sector have abused the loans advanced to it, as well as the land taken over from peasants and handed over to it, and has refused to develop agriculture, including food production; (ii) the private sector has sabotaged even the distribution of imported food. What about industry?
- For all its vaunted “efficiency”, Sir, and for all its touted “courage and boldness”, Sir, the Nigerian private sector, has by and large avoided industry, where investment takes some time to mature. Instead, the Nigerian private sector – the veritable blood-sucker it is – has preferred to “invest” its stolen and borrowed money in the safety of real estate. Either that or the Nigerian “private sector” has brought themselves – with the aid of Government decrees and Government loans – into “part-ownership” of profitable foreign businesses. And now they want to “buy” – once more with the aid of Government legislation and Government loans – lucrative Government enterprises. Because of this “caution” – caution indeed! – What little industralisation Nigeria has to show for the last 24 years has been the result of direct efforts of Government – in the case of heavy industry, to wit, steel – and of foreign investors, who are out here to capitalize on the laziness and general weakness of “our” private sector, swindle us; make “a quick buck” and bolt, or be deported, if they open their mouths too wide, as in the case of Nagaty of ZIL fame. It has been in a desperate effort to find substitutes for the infantile “Nigerian” “private sector” that successive Nigerian Governments, bereft of imagination, resorted to over-generosity towards foreign “investors”, an over-generosity, that has included: “…tax holidays, accelerated depreciation of capital, compensations for inventiveness and use of local substitutes, etc”, to quote the Fourth Nigerian National Development Plan, 1981 – 1985. So much for the “efficiency” of the Nigerian “private sector”.
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